CRTC the target of consumer ‘outrage,’ but the government has more power to make change

On most days, the CRTC is not top-of-mind for the average Canadian, but on March 22 the commission issued a key decision on value for signal, and the public took notice. The lament that it’s “time the CRTC start thinking about consumers”—as one newspaper expressed it—rapidly became a refrain in editorial pages and online postings following the decision. Some consumers took the decision, which may or may not affect the nation’s television bills, to heart. “The CRTC protects monopolies,” read one anonymous online posting. “The CRTC is a disgrace,” read another. The CRTC has noted that only one “specifically consumer-focused association” submitted comments for the value-for-signal proceeding, despite consumer “outrage” at the prospect of paying more for their television services. One commissioner, Michel Morin, dissented with the CRTC ruling, going further than mere “outrage” in his description of the plight of the consumer. “Though he is the first partner of the Canadian broadcasting system, the consumer is left out in the cold by this decision,” Michel Morin wrote in a minority report. That there is a certain level of discontent with the commission is evident. But what isn’t clear is whether the criticism is the symptom of real and broad consumer concerns, or if it’s a storm brewed by warring industry stakeholders. “I wouldn’t take comments written on the bottom of web pages to mean anything except that there are people who have got a lot of time on their hands,” Professor Christopher Waddell, Carty chair in business and financial journalism at Carleton University, told The Wire Report. “There may be some people who are unhappy … but I don’t think that’s a representative sample of the public. I haven’t seen any street demonstrations.” Professor Jeffrey Dvorkin, the Rogers distinguished visiting chair in journalism at Ryerson University, said public discontent with the CRTC isn’t anything new. “My sense is that if there is discontent with the CRTC, it has existed prior to this decision,” he said in an interview. “This recent decision has given people a greater appreciation of what the CRTC is capable of doing. Before this, there was a widespread sense that the CRTC was really engaged in a sense of laissez-faire economics, hoping that the marketplace would make the decision.” Still, public dissatisfaction with the CRTC appears to increase when the commission issues decisions of interest to the media and consumers. In August 2009, an online petition to “dissolve the CRTC” gathered hundreds of signatures after the commission ruled that Bell Canada could institute usage-based billing for wholesale Internet services. “Some people who don’t like a CRTC decision want to abolish ,” the Public Interest Advocacy Centre’s (PIAC) executive director, Michael Janigan, said in an interview. “But in effect there would be no mechanism to affect the policy they want to affect.” Similarly, Michael Geist, Canada research chair of Internet and e-commerce law at the University of Ottawa, told The Wire Report that there “has been public discontent with the CRTC for as long as there has been a CRTC.” But Geist attributed recent spikes in criticism of the CRTC to increased public interest in telecommunications and broadcasting policy. “Truthfully, there has been a lot of talk lately, and that reflects that the CRTC has been active on so many files. I think the public is more engaged on these issues than ever before,” he said. “I’ve been critical of some CRTC decisions, and I’ve been supportive of others, and I think that’s true for a lot of people,” he added. “There is no doubt that there is a perception amongst some that the CRTC is outdated and well beyond its best before date, so to speak. I’m not sure I share that view. I think there is a role to play for a regulator. Frankly, if we were to kill the CRTC, we’d have to replace it with something that is to the CRTC.” Geist, like other experts who spoke to The Wire Report, said public dissatisfaction with the CRTC is often misplaced. The commission, he said, can only do as much as its governing legislation permits. At times, public frustration really lies with existing regulatory models, but it gets directed at the commission rather than the government, which has the power to change the regulatory framework. “Some of the frustration with the CRTC is misplaced. The CRTC itself is stuck with legislation that makes it difficult to do its job,” Geist said. Janigan said part of the public criticism stems from a lack of understanding of the commission’s mandate, which does not necessarily focus on the best interests of consumers. “In the case of broadcasting, suffers from the fact that the act it administers does not really take into consideration consumer interests,” he said. “Secondly, mainstream consumer organizations are not before the commission, so that most of the time the battles that are fought there are primarily by those who have an interest in the result, not independent consumer advocate. “In large part,” Janigan continued, “some of the problems lay in that this government, and the governments before it, have not amended an ancient act to allow consumer interests to have supremacy and be represented before the commission. That is principally the source of many problems in broadcasting.” The CRTC's report to cabinet on value for signal, issued last month, recommended that the government amend the Canadian Radio-television and Telecommunications Commission Act to encourage consumer groups’ participation in CRTC proceedings. The commission said the government should amend the act “to clarify that the Commission has the power to award interim or final costs and incidentals to participants in broadcasting proceedings before it.” Dean Del Mastro, the parliamentary secretary to Heritage Minister James Moore, told The Wire Report in a previous interview that he believes the government is going to consider the idea. For the government’s part, it is stressing the interests of consumers. Moore and Prime Minister Stephen Harper have said they are considering consumer interests in their review of the CRTC's value for signal proposal. Pollster Nik Nanos, president and CEO of Nanos Research, said the CRTC is a “bit of a casualty” within broader business and political battles waged in the public sphere. Nanos said that what some qualify as public perception is in reality an image industry players are trying to project, serving their self-interests. “We have to be careful to delineate between perceptions of the CRTC and its role, and the reaction of business interests to CRTC decisions,” Nanos said. “What we’ve seen, at least recently, are major business interests looking at CRTC decisions as a zero-sum game, from a shareholder perspective. One industry is perceived as benefiting more than another industry, and as a result, stakeholders have had a tendency to whip up, or attempt to whip up, public sentiment against the CRTC.” Although Nanos didn’t refer to it directly, he seemed to allude to last year’s lobbying activities, when the broadcasters (“Save Local Television”) and cable and satellite distributors (“Stop the TV Tax”) fought very public advertising and public mobilization campaigns against one another over the commission’s value-for-signal proceeding. “It would be fair to say that a significant part of any reaction is actually manufactured by organizations with interests they have before the CRTC. They do this in order to encourage political interference in the CRTC by trying to influence the public,” Nanos said. To give the CRTC more power to reflect the interests of consumers, the government would have to modify the commission's mandate by amending the Broadcasting Act, Janigan said. “Right now, they have an act that basically is geared towards assuring the industry is reflective of Canadian culture and that it promotes Canadian content. It was never drafted with a view of protecting the interests of consumers for broadcasting services,” he said. “Effectively the act has to be amended.” The House industry committee is currently studying regulatory reform, namely Canada’s foreign ownership restrictions. The Conservative government has committed to opening the doors to foreign competition in the Canadian telecom sector, which it argues will stimulate competition. Janigan said “a level playing field” needs to be created at CRTC hearings. “That doesn’t exist at the moment. What we have is a war between broadcasters, broadcast distribution undertakings, and producers before the commission. Consumers are left out of the equation. That’s not necessarily the fault of the CRTC, it’s really the fault of government,” he said. “I think the ball is in the court at this point.” kfournier@thewirereport.ca

CRTC the target of consumer ‘outrage,’ but the government has more power to make change

Broadcast | April 1, 2010

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